L Capital Asia takes minority stake in Korea cosmetics player
L Capital Asia – the private equity arm of luxury goods giant LVMH – has acquired a minority stake in Clio Cosmetics, a South Korea-based color cosmetics manufacturer, for an undisclosed sum.
L Capital said it would become the second-largest shareholder in Clio, describing its investment as a partnership with CEO and founder Hyun-Oak Han. The PE firm hopes to use its retail resources and network to provide insight into consumer markets, retail operations and product design. There is also a desire to help Clio access international markets, particularly China, Europe and the Americas.
Founded in 1993, the company has three brands, targeting women in their 20s and 30s: Clio Professional, Peri Pera and Goodal. Its products are available in 800 stores across Korea, as well as in 2,700 establishments internationally, mainly in China, Hong Kong and Taiwan. Clio claims to have generated average annual revenue growth of 30% over the past deacade.
"Korea is well-known for influencing consumer trends across Asia, and for their quality beauty products. I believe that the combination of Clio's strong product knowledge and well-established brand name, with our strengths in market access and insights on retail and marketing make for a strong case for growth of Clio," Ravi Thakran, chairman and managing partner of L Capital Asia, said in a statement.
Of the 25 companies in which L Capital has invested, two are beauty brands: Dr Wu in Taiwan and China-based Marubi. Clio also represents the firm's second deal in South Korea, following a KRW61 billion ($60 million) commitment to YG Entertainment, a record label and talent manager, in 2014.
Korean cosmetics is a popular target for private equity, not least because of the potential to leverage demand for high quality products overseas. For example, Bain Capital Private Equity and Goldman Sachs recently agreed to acquire a majority position in Carver Korea, a specialist cosmetics supplier, for about KRW400 billion.
L Capital Asia is currently investing its second fund, which closed in 2013 at $950 million, plus an unspecified GP contribution. Earlier this year, the global L Capital unit agreed to merge with consumer-focused GP Catterton to form L Catterton. L Capital's existing private equity and real estate operations in Europe and Asia will be combined with Catterton's North American and Latin American business.
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